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in the quarter coming it's been a real good quarter, there are going to be a lot of people trying to protect their game. if we come in monday morning, watch "squawk on the street" and we'll talk about this, there's something the bears find they can talk about that's bad about cyprus, they will. we are looking for companies with really good earnings and we'll circle that and buy them. like i said, it is always more right here on good evening everyone. i'm larry kudlow. this is "the kudlow report". top of the news this evening, it looks like cyprus hammered a deal with the european union and the stock market sniffed that out well in advance with a 91 point game. where is this long awaited correction? with the rising economy and profits this rally still has legs. also in year three of obama care premiums and insurance costs are rising sky-high. so are taxes. and small business costs are

reducing profits by as much as 65% according to one small business owner we will talk to tonight. and the virtues of a free market capitalism that we talk about every night on this show are now forbidden fruit at stanford university. a popular long running pro capitalist course at that school has now been cancelled. what is up with that? "the kudlow report" begins right now. first up, a major vote in the cyprus parliament helping to get that country closer to a teal with the european union. michelle caruso-cabrera joins us from cyprus again this evening with the very latest. good evening, michelle. >> reporter: larry, lawmakers here in cyprus taking a huge step tonight to prevent the financial collapse of their country. they pass ad law that will allow for the restructuring of their

banks. this essentially means their sickest and largest banks will be down sized and made more healthy. this was a key demand by the european partners in order to secure a 10 billion euro bailout for the country. when the law is passed depositors who hold less than about $130,000 they will be fully protected. those who are above 100,000 euros are likely to face loss. they may get equity in a new bank, we'll have to wait and see. but bottom line this is what we needed to see by monday in order for the bank to be able to reopen on tuesday with the key backing of the european central bank. back to you. many thank to cnbc michelle caruso-cabrera. let's bring in our contributor, andy bush, author and publisher of the "bush update" and lecamp.

>> i would caution optimism. there's going to be a bank run as soon as these banks open up on tuesday. the corporate money will pull out as fast as they can. we're not sure how much will destabilize what's left of the cypriot banking system. this isn't like an earthquake but this will help stabilize things. again, europe doesn't have any growth so the united states still looks like the place to be for your investments. >> absolutely. but jim lecamp just on the bank run i can't predict anything but what i'm reading and getting reports on is that there will capital controls on the banks, with the two biggest banks to calm this down. >> of course there will, but whatever they let you pull out people will pull out. wealthy people talk to one another. no one will want to hold their money in those banks. not only that if you have deposits in a port fwees bank, a spanish bank, greek bank and you

can take that money across the street and put it in a german bank why downtown you do that now they they set this precedent they will take your money because they have failed. this is a good thing. it's always been a good thing for investors to bet against back bone of leaders. this one has set some dangerous precedence and there's going to be some spill over effects. >> andy bush, i want to talk about other things but let me just ask. the very bad scenario thattism lecamp just pointed in portugal, spain, people will take their money out and put you want in german banks why hasn't that happened already? >> well, i think some of it did. obviously we've seen some people bailing out of greek bonds. obviously we saw yields spike this week on that. just a reminder, this isn't a bad precedent. this has happened already. in 1992 the italians impose ad

0.6% tax on deposits. so europe has history of doing this kind of stuff. that's what makes people nervous. but the bottom line is this, you know, when ben bernanke comes out and says that the cypriot situation is not going negatively impact the united states that's when investors look towards for guidance. i think from that standpoint we kind of get an all clear that the central bank is always there to back thing up >> you're absolutely right. i believe no matter what cyprus did the ecb and eu were going to back this thing up anyway. they don't want the eurozone going down. they don't want this to happen right now particularly with all the craziness now going on in italy. let's move on. jim learningcamp, everybody is g about the stock market. despite a few bad apples profits are strong. you buying or selling? >> we're still buying. we're in this goldilocks

scenario where the economy is hot enough where corp proclamations can make money. but not shot that the fed will tighten. ate sweet spot for stocks. it's i wanting what's happening with the market right now. unlike every other rally since 2009, copper is not participating, base metals are not participating, the dollar is getting stronger. what does that say? i think it says money is coming to the u.s. from other countries, from other areas like the eurozone, from japan and that's pushing up all assets, especially stocks. >> you know, andy bush, i think it also -- i like what jim is saying. myself still rather optimist about a decent economy, good profits, 2.5%, 3%. andy china. i think the copper story and the commodity story is being negated to some extent by china and china worries. >> think so. clearly china is going to don't put pressure on the property sector.

their property prices were really hot this past month. and that got, you know, people concerned, although i will say the shanghai index did rally four straight days in a row but it was very small rallies. let me take a little issue with jim because i love the dopeleganger thing. i'm not as bullish as jim is. we have two or three week period where a lot of things will wash through the market prior to getting your earnings out of the united states that are negative. obviously cyprus. numbers out of eurozone weren't at good. as far as china is concerned yes. but more importantly japan. that we saw 300 point drop there. the whole weak yen story has run its course. i don't see a lot more upside for the nikkei. >> i'll disagree with you. >> we don't disagree that much. >> hold on a second. i want my lick in. i disagree. i'll tell you why. i think japan is fighting

deflation. and i think their new governor is going to start flooding the market with high powered reserves in an attempt to get the money supply going, and stop the deflation. and i think that's a good thing. and you know what? i want to go back, jim i want to tell you one reason these commodities are behaving themselves i have come to believe is that the federal reserve is not as loose as a lot of people think it is and, again, the money supply has been very moderate, the actual inflation numbers have been very moderate. worse case inflation scenario from bernanke has not materialized and i think commodities went too far. that's my own personal take. >> well they keep changing the definition of inflation. if you took inflation the way they read it in 1980 we would be running at 56.5% inflation right now. you look at food costs, gasoline cost, consumers. they are getting hit by inflation. if you look -- >> prices are falling.

>> larry -- >> some prices are falling. >> if you look at the consumer spending rating in the last measure most money went to gasoline and consumer discretionary -- >> that's going to go away. that gasoline spurt was a little refining spurt. has no meaning. it's going to go away. one thing it's funny me defending bernanke, i know this is very weird. i just want to say when he said in front of congress he looked at the inflation rate under his at the entrepreneur and it was 2%. i looked at it too, that he was telling the truth. and i've also been persuaded by friend of mine to take a look with the velocity and turnover of money falling, the m-2, 7% not a big number. i think inflation is the most overrated item there is and that's good for the dollar and that's good for the stock market. that's what i'm saying. >> larry he was being disinagainous. he inherited a deleveraging environment. of course he's got a good record

on inflation. he got lucky as it per takes to inflation because we had deleveraging. >> andy bush, the best part of jim is he's going to give you all these reasons, what does he call them, doppelganger reasons. when you have lecamp on the show it's not what he says it's what he's doing. he's like a federal government official. not watch what he says but what he's doing. that's why i love the guy. look at him he can't stop smiling. neither can you. you're both great. thank you so much. now folks, a busy day and night on capitol hill. the senate is busy voting on amendment after amendment in their budget bill. we got two distinguished senators about to join us give us their take and later on the show why can't police departments get any ammunition while the department of homeland security has bought up 1.6

billion rounds in the past year. there's no ammo for handdowns, shot guns, rifles, for training. what's up with this or is the dhs in a form of gun control that the congress can't legislate? folks don't forget free market capitalism is the best path to prosperity. stanford university stopped its course. we'll hammer them for it later in the show. i'm larry kudlow. please stay with us. zap technology. departure. hertz gold plus rewards also offers ereturn-- our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz. at tyco integrated security, we consider ourselves business optihow?rs.

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. being be dubbed vote-a-rama senate working through 400 amendments. democrats can only afford five defections in the upcoming votes on their new tax and spend budget proposal which is expected i guess late tonight or early tomorrow morning. joining us now two distinguished senators, a demonstrate from new hampshire and bob corker, republican from tennessee. senator sheen, let me begin with you. what do i see here? you took out the sequester. that's out of this new budget and put in another trillion dollar tax hike which my friend jech sessions says it's really lie 1.5 trillion. i don't see this as a gat vote or any good for the economy

either. >> well, i think you're wrong. the fact is taking out the sequester is one of the best things that the budget does. in new hampshire we're already seeing the impacts of that sequester. our second largest city will have the tower closed because of the sequester. it's one of the busiest aviation airports in new england. we're seeing workers at our naval shipyard who will be furloughed and small businesses all across new hampshire who are being affected by that. you know, the best way we can deal with our debt and deficit long term is to grow the economy and that's what this budget does. it recognizes we need to invest long term. we need to cut spending and it does that. it does not do that. >> we need to invest long term. >> senator, with all due respect and i month your point of view may i just add after $650 billion tax hike already this year you raising taxes at least another trillion, i don't know

how that is pro growth. regarding the sequester, i can understand making some changes to the sequester with regard to the management of the subaccounts particular in the defense department but you're not doing that. you're spending most of that money. associated press reports often years there may be a couple hundred billion dollars of spending cuts but the sequester was 1.2 trillion. you are in effect raising spending and raises taxes are you not? >> the budget closes a lot of corporate loopholes where we've been paying for people who go overseas and create jobs rather than paying to create jobs here at home. i don't think that's what we ought to do. that's one way we come up with the revenue in the budget. we also cut spending in the budget. we cut health care by $275 billion. most important as i said this is a budget that allows us to put those back end spending cuts in

a way that allows the my to grow. the fact is none of us think going back into a recession is going to be good long term. what we need to do is make sure we continue to support those areas that help middle class families, that help -- we need to make sure college students can continue in higher education, we need to make sure we protect medicare and what we've seen and the alternative is they don't do that. that create as voucher program for medicare. >> we certainly agree on the opposition to a recession. senator corker, you going to vote for this budget? >> no, i'm not. i don't expect you think i would. it really doesn't address any of the major issues that we need to be dealing with. there's no entitlement reform. republicans would like to see a 75 year fix for our entitlements so that we'll see, know those will be here down the road. if you want to know the truth, larry, neither budget does the things that need to be done for

our country but i will say two nights ago we passed a cr, first time since i've been in the united states senate in six years and to months. i was able to vote for a bill that cut real spending. we'll go through this budget process and the democratic budget obviously as you just mentioned doesn't do what it needs to do. republican budget could do more, maybe there's a remote chance that we have a conference that actually addresses the big issues of the day which is the entitlement programs. but i really think, larry, we're building a little momentum and hopefully, hopefully this summer we'll have an opportunity to really do something that is great for this nation. but i do like what i'm seeing. obviously this budget is a nonstarter. i do like paul ryan's obviously a lot more but still neither addressed the big issues that we need to address and we need that, we need presidential involvement. >> that's the thing. that's right. i just want to go with this.

i'm in a very great mood tonight. president obama speaking to republicans at dinner at that posh jefferson hotel and also speaking to the republican caucus said basically that he would go to work on some entitlement reform. senator shaheen i'll direct this to you. regarding cost of living adjustments, regarding means testing, regarding eligibility. the president said he would put that on the table. i'll give him credit for that. why don't we take it up on that. senate democrats are opposed to any entitlement reform from what i gather. you all are way to the left of president obama and i believe the senate democratic caucus is a huge barrier to the kind of entitlement reform that mr. corker and frankly president obama are talking about. >> senator corker and i certainly agree on the fact that one of the best things we can do is come up with a long term plan to deal with this country's debt and deficit, but one that also allows us to grow the economy in

the meantime and obviously i've said all along we got to look at all aspects of the budget, we need to look at the mandatory programs and there are a lot of democrats who are willing to do that but we also need to look at revenues because we're not going get where we need go unless we look at everything. >> i got to leave it there. tax reform lower the marginal rates and get rid of the loopholes that's all i'll say about revenues. senator jean shaheen thank you very much. bob corker great to see you, sir. now, folks, did the london whale trade fiasco cost jamie dimon a job? that's coming up next on kudlow.

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now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. well jpmorgan chase is going to stand by its man. cnbc's bertha coombs joins us now with that story and more. good evening. >> royalty worth its weight in gold. cnbc learned the justice department is in the advanced stages of a criminal probe into the so-called london whale traders. the probe is looking into whether any former traders mismarked their position. the london whale hasn't swallowed jamie dimon. the board endorsed dimon today to remain both chairman and ceo.

jpm closed up less than 1%. the faa today said it's closing 149 air traffic control towers. that's not sitting well with some republican lawmakers. one senator says this is quote like removing stop lights and stop signs from our roads. other critics say the faa could save the towers by tapping into millions of unspent research dollars. and for the famous punxsutawney phil has given his last forecast. a lawyer has indicted the famous groundhog who did not see his shadow on february 2nd. no shadow means an early spring. not exactly. spring officially did spring this week but boy it's still cold in much of the country including here. >> i think the prosecutor has a

good idea. i've been cold for weeks and weeks and weeks. >> let's go the florida. let's move the show to florida. >> i have to move the show. let's get some reaction from our guests. we welcome back congressman frank palone. the great mark simone. >> you can talk about anything you want. do you disagree with me about the democratic budget in the senate? they got rid of the sequester and spending the money and raising the taxes. that's not my idea of from you galt or pro growth. >> the most important thing senator shaheen said she talked about pro growth. that's what this is all about. you can grow the economy, create more jobs, bring more tax revenue into the federal government, then i think a lot of these concerns go away. i mean you talk about entitlement reform but when we had a growing economy, basically

the problems with entitlements were gradually disappearing. so i think what she's saying is the democratic budget in this case the senate fwoij the extent that it really does things to invest in the economy, infrastructure, education, research and development is going to grow the economy, create jobs and that's going to postpone the problems with the entitlements. >> robert, i agree with my friend frank we need growth. i would love to see pigs fly. if you can spend and tax your way into growth we would have dope that already. >> exactly. >> the trouble is that idea doesn't work. >> it never has. let me just back up and say finally we're having a state of the uniontive conversation about the budget. the democrats had control of the senate for the past four years and haven't voted for it. why? it was a political document. the question becomes is whether or not you can have smart growth and also less government regulation and also less taxes.

and the question then becomes can the senate be a voice of reason to be able to have that type of a conversation because i'm not sure the house can, with the right budget plan because a lot of folks are saying that's reliable. the real question can we have a state of the uniontive discussion about entitlement reform. medicare, medicaid and social security needs to be reformed. >> but mark, i won't give him credit for this closing down control towers. this gang here, this democratic gang, sorry, frank. they will do everything they can to scare the heck out of every american over this lousy $44 billion budget cut in a $3.6 trillion budget and this faa stuff is another example of closing town towers. most of which are obsolete according to their own inspector general. >> they are not cutting any money. we'll spend more money next year than this year. it's a cut in the increase.

you're being tough on these democrats. they haven't pass ad budget in years. they forgot how to do it. 33 of 100 of these senators haven't pass ad budget. they weren't in office the last time a budget was passed. >> they will pass this one. >> you got a mid-term election coming up. when you have a president running that brings all the democrats out to vote. these guys have to be careful. >> it will pass. >> we'll come back. plenty of time to talk about this. only got five vote march about in so that's a good point. third anniversary of obama care and we have more ugly truths about obama care coming out. we learn for example this week young people with individual health insurance will see their premiums skyrocket. as well as everybody's else's. small businesses have to cut jobs because high profits will be taken away. we'll talk to one of those business owners up next on kudlow.

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welcome back to "the kudlow report". in this half hour, the department of homeland security is on a buying binge. 1.6 billion rounds this past year and it could be putting police departments at great risk. just what the obama

administration needs with all that ammo. what are they up to? then we have the liberal left coast striking again. stanford university strikes a popular pro capitalism course from its curriculum. yet it keeps one that is anti-free market. what is up with that? this is what passes for free speech out there. david horowitz will weigh in. small business may be bracing obama care making some companies less profitable once the law takes full impact. in fact "new york times" did a case study today on baked in the sun, a california bakery. the company could lose a staggering 65% of its annual profits all because of obama care. so, here with us, rachel shine is the owner of baked in the sun. our panel is still with us. miss shine thank you very much for coming on. 65%. how you going to stay in

business? >> i hope we can. it's a matter of weighing our options and figuring out what the best thing to do is. i mean frankly our employees need health care. they work very hard. they should have. they need to be able to have health care for their families. the question is whether or not my business model was designed to be able to support that. we exist in an industry where the margins are very slim and we've been very lucky to be able to grow our business so that we are the size that we are. most of our competitors are much smaller. they are less than 50 employees. and they will qualify for being exempt from the law. but because we've been lucky and we've grown our business to where we are, we now are at the point where we need to provide health insurance according to the obama's new law -- >> so you're being penalized for your success. obama care is penalizing you for your success both in terms of full time employees and in terms

of hours worked. i don't understand that. you've grown. why don't they give you and incentive rather than a discouragement. >> exactly. as i said, you know, i do want my employees to have health insurance. and i tried to make that work in the past. but they did not want to participate one it at the time. and now as of january 1st they will have health insurance but the problem is that my business model and most of the business models in a lot of these low margin businesses are not designed to support that. so you have all these businesses and, you know, business from 50 employees down are exempt from the law. but there's a lot of small businesses from 50 employees up who are going to be very adversely affected and whether or not they can survive, you know, we will survive. we'll find a way to do it and figure it out. whether or not that means our employees get the insurance by going to the exchange or whether they get it from us. but the fact is that there's a lot of small businesses out there that are really is going

to be hurting from this law and how they transition into this is going to be the difficult part. >> as i understand this, i'm reading from the "new york times" the cost of compliance is 108,000 plus 10,000 in overhead to manage the plant. okay. but the cost of paying the fine for not offering insurance is $130,000. that's a big number. a lot of people think you can just walk away from this and that the fine for walking away is small. if fine is actually quite substantial. you can put your people in the public insurance exchange but that's not helping you. a lot of people have misconceptions about that. >> correct. in agree. if they go the exchange it will cost me a lot more, i assess it will cost me to provide insurance. it's a moving target. and no one -- there's thousands of small businesses out there that don't know exactly what the minimal level of care is which is what we're supposed to provide and how much that will cost us and every week it gets

redefined and even changed. so you can be the kind of small business that wants to be on top it but it's very difficult because each week it changes and most small businesses like myself we have a business to run. >> don't you have to raise prices and therefore be, you know, lose some competition? >> that is very possible. the problem is as i've said we don't have an equal playing field. we've been at an advantage we're bigger and now we're at a disadvantage. most of our competitors will not have to raise their price because they won't have to provide that health insurance. >> the solution sway lousy solution for this country is for you to just shrink and layoff workers. that's not a solution i like or anybody else but that's what you're implying. >> it is an option and it's not an option that i like because obviously that doesn't hurt my workers or myself. it doesn't help my workers or myself in any way. >> rachel shine, thank you for coming on the show and i wish you all the luck in this health care dilemma. doesn't sound like a happy

story. let me go to my panel on this. frank, did you write the health care bill -- i can pin the whole bill one. you were one of the main backers. >> i was. >> what do you say to miss shine? >> i listened to her and i admire her because she does say that she wants to provide health insurance to her employees and continue to grow. the fact is that the affordable care act is trying to as much as possible create incentives for employers to provide health insurance. >> she's describes disincentives. >> no if you listen to her it makes more sense for her and i read the article to actually provide the insurance through her company rather than go to the exchange and pay the penalty. >> a tiny bit. the difference is 64% versus 65%. >> larry what we're -- >> she should be rewarded -- >> i want to stress to you we want employers to provide insurance. and if they are smaller than her and they do get the tax credits which is one of the reasons to

encourage small businesses even though they don't that have mandate to require it to provide health insurance she falls into the mandate category and she seems to be opting for it. look, the fact of the matter is the goal of the affordable care act is get everyone insured and try to get employers to do that. >> what's really happening, mark, with this small businesses are getting screwed. premiums are rising. united health group, they gave a presentation that said if individual consumers buy their plan, if individual consumers, premiums will go up 116%. 116%. and have already started to. small business premiums according to you nighted health group and others up 25%. how does that help anybody? >> it doesn't. everybody's premiums are going up. cost is going up. medical device tax. everything is classified as a medical device. you have 50 points. it could be a hedge where the

profits it's hundreds of million dollars. it's an arbitrary number. >> there will be a number between the businesses that are required to provide it versus those that fall below. those that fall below get tax credits. the main thing i'm trying to stress i lutzened to her and saw it in a positive light because she's willing to provide insurance. >> did you see a smile on her face? come on. >> no. >> whathat i saw was she was conflicted because obviously she wants to do the right thing and she's stuck between a rock and a hard place. the first bad option is either to raise prices of her goods in a bad economy and also obviously disadvantaged with her competitors or second thing is to perhaps maybe layoff workers -- >> i don't think she will do that. >> i asked her. she said she doesn't want to. i don't want her to. but that made be an option. >> it sounds like she's going to go ahead and provide the

insurance. >> she can't go out of business because she has a kind heart. >> the bottom line is we want to cover everyone and of course the government has got pay for part of that. we hope small businesses contribute. we provide incentives for them to do that. if we don't have health insurance or coverage for everyone then you have the same old system where people go to the emergency room and everybody else pays because those people who go the emergency aren't contributing. >> have to take a break. we could have done this differently. we could have done this substantially differently and put market competition so people like shine wouldn't be in the dilemma they are in. she can't stay in business the way this is running. and there are millions of small businesses. i mean that's why this thing is so unpopular. every poll shows how unpopular obama care. this is like happy third birth day we hate you. we just hate obama care. >> the policies that i think are -- >> i got to get out of here. now here's a disturbing

question. why is the department of homeland security on a bullet buying binge. reportedly this is leaving police departments short on ammunition. why does the obama administration need 1.6 round of bullets. what are they going to do with all of that stuff? we'll be right back. [ male announcer ] with free package pickup from the united states postal service a small jam maker can ship like a big business. just go online to pay, print and have your packages picked up for free. we'll do the rest. ♪ we'll do the rest. it's not what you think. it's a phoenix with 4 wheels. it's a hawk with night vision goggles. it's marching to the beat of a different drum. and where beauty

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as the senate sets the stage to debate sweeping gun control reforms next month some members of congress are demanding answers as to whether the obama administration is already attempting to choke off supply? get this. department of homeland security stockpiling huge arsenals of ammunition. more than 1.6 billion rounds of ammo, in fact, which has contributed to a nationwide ammo shortage that is leaving many police departments scrambling for resources. what is up with this? congressman frank pallone is here. is this department of homeland security on the slide with the gun control policy that they couldn't possibly implement with legislation. are they buying up ammo so it can't be used by anybody else? >> don't think so. they are buying up guns.

the last few years they see main stream press will lay down on the job and not question anything they do. so they said let's test this with something so preposterous. where is the media. >> interesting point. republicans have written a lot of letters and dhs will not give an answer. they will not. and you look at that article today. police chiefs all over the country they can't get ammunition. it's affecting shot guns. it's affecting pistols and training which is even worse. >> what's ironic about that the dhs issued a statement saying this is exactly for training. they want to do this for training all around the country. do i think that this is perhaps a backhanded way for the dhs and obviously the administration to perhaps maybe influence the gun control debate. do i believe that. >> i was going to ask you, is this a back door way of gurn control?

if you don't have the bullets you can't shoot the gun. >> i don't believe in these republican conspiracy theories. we have to address gun safety. the president has put forward a comprehensive plan and we'll have some movement on it. this san issue when you talk about universal back ground checks, you talk about the high number of clips that we can, i think democrats and republicans can come together and actually pass a comprehensive package. >> you're not answering. i want to know what the department of homeland security is doing buying 1.6 billion rounds? >> i don't know exactly but i don't buy into the conspiracy. >> look at the social media on this. people are coming up with wild conspiracy theories. they are saying war is breaking out. >> this is enough ammunition for 20 years. >> let's not get into the conspiracy theory. >> what else is there? >> we have to address gun safety. we have to teal with universal

background checks. >> knowing politically that the senate is not going to pass gun control this year, the administration is probably saying what else can we do? the vice president sat down -- >> the administration never said the priority was the assault weapons ban. there should be one. we're coming together now on issues like universal background checks and we'll see democrats and republicans passing something in the house. >> are you for universal background checks? >> yeah. >> i think there's a compromise on that. >> you've driven up the cost of ammunition which another drain on every police department. costs are going up as a result. >> again, i can't get to the bottom of what's happening but i don't buy into the conspiracy this is some effort -- >> the vice president said all options are on the table when it comes to gun control safety and maybe some executive order. this is not out of the realm of possibility the administration is saying what creative things can we do to limit the supply of ammunition. i'm just throwing it out there.

>> when a congressman says i can't get to the bottom of this -- >> just think you're getting into conspiracies. the issue is will we get universal background checks. >> the issue is what is department of homeland security doing with 1.6 billion rounds of bullets? what are they doing? maybe they will go in a circle and kill each other. there's a certain insanity to this whole story. we would like to remind you every night we do this how free market capitalism is the only way to go. but the egg heads at one top university apparently disagree. stanford has cancelled a very popular pro capitalist class. nation's top education critic david horowitz is about to join us. it was a popular course and they killed it. and without a line.

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. all right. breaks my heart but stanford university has canned capitalism 101 from its college catalog. they are keeping a course that challenges the moral goodness of markets. this is just another example of the left versus capitalism? are these elite schools just totally clueless. we'll bring in david horowitz. other of "radicals, portraits of a destructive passion." let's kick it around our panel.

david horowitz, it's good to see you but do i not like this. is stanford that far to the left they would take out a pro capitalist course and put in an anti-market course in its place. >> it's easy to explain this. inside every liberal is a totalitarian screaming to go out. they know what's good for you. they know what's politically correct. they don't want anybody confusing them with the facts. this isn't just a course, this is the only course in the liberal arts school that's dedicated to examining the moral foundations of capitalism. >> before we get to those moral foundations this is a popular course. you read this story -- >> oh, yes. >> these kids all wrote in how much they liked that course. and there was a great demand for it. and they still pulled it. that's the part that makes me

very suspicious about what's going on. >> they justify it as oh, just a mere administrative move. that shows you how calculated and determined and dishonest they are because they see it as a threat to their program. now stanford is typical of all elite universities in this country that they are -- i'm not speaking of the business schools or physics departments -- but the liberal arts colleges, universally almost are controlled or run by dedicated leftists who are not only anti-capitalists but also fundamentally anti-american. that is they are the people who oppose the war in vietnam, they oppose the war in iraq, they describe bush as hitler. i wrote a book called "one party classroom" which are set up as

indoctrination courses. >> they have the hoover institute out there. herbert hoover himself was wrong during the recession. >> that's not stanford. that's a conservative institute on the campus. >> i want to read mark simone my pal steve forbes tweets capitalism is the most moral system because it respects man's rights. now stanford may not agree with that but do i. >> you're being a little out dated. we're in the obama economy. a college student doesn't need to study capitalism, moves into his parents house, lives there until he's 30. is on their health care plan. where do you find a professor to teach the joys of capitalism. >> there has to be somebody out there. >> they are there but they are a vanishing minority. >> capitalism is freedom.

i appeal to your higher spirits. there must be an agreement with us some place. capitalism is about freedom. live, liberty and pursuit of happiness is done best through the free market capitalist system. >> i agree with you, larry. i don't know what stanford is doing. obviously they can do what they want because they are a private university and we have freedom of speech but i certainly would encourage the teaching of capitalism on campus. but i think you're all on a different planet. liberals are very supportive of capitalism. and this notion that somehow that the whole country has become anti-capitalist is not true. >> dave horowitz the congress man believes liberals are capitalist. >> this is delusional. they are not liberal. what are they liberal about except drugs and sex. >> come on what planet are you

on? >> excuse me. congressman, i heard you defend, you are defending the obama administration, you know their goal is a single payer system which is a government controlled -- >> think it's an interesting debate. let me bring robert back in here. i'm out of time. liberals can be in some sense capitalists. they can be. they just need heavier governmental intervention or a lot heavier. but i think at the end of the day what troubles me about this these college kids, impressionable college kids should understand the difference between why the american economy succeeded, and why the soviet economy failed. it's that simple. why the soviets failed because of their system and why the free market economy of america even in its worse moments succeeded. >> in an institution that should be thought there because of freedom of expression. >> they don't want it taught there. you show me the university which

has a department which teaches the positive aspects of capitalism, you know, then we can have this discussion. >> hillsdale college is one conservative school. there were a few people on the if a kuflt princeton. >> 100 top -- >> i got to go. all right. we'll go back to this. thank you very much. america beat the soviet union. that's it for tonight's show. stanford, please reconsider. thousands of qualified technicians, and a personal passion to help protect your business. when your business is optimized like that, there's no stopping you. we are tyco integrated security.